Lord McKenzie of Luton: My Lords, I thought that the Question was about a local income tax. I ask the noble Lord in that regard to await the outcome of the Lyons report and the Government's response to it. On the other issues about taxation that he raised, I am sure he will be aware that nobody would make any commitment in respect of what will happen to future taxation in advance of budgets. But I remind the noble Lord that the Government have introduced a lower rate of income tax—we inherited a basic rate and a starting rate from the Conservative Government—the lowest rate of corporation tax since that tax was introduced, a lower effective capital gains rate for businesses at any time in the tax's history and some other substantial tax benefits as well.

Lord McKenzie of Luton: My Lords, council tax does not always increase as a result of home improvements, it depends on the nature of those improvements. Clearly home improvements can give rise to an increase in the value of a property which would be taken into account in due course. Things like summer houses and sheds would not be included, but if the noble Lord is thinking of swimming pools and stables or workshops that may be a different matter.

Lord Hogg of Cumbernauld: My Lords, does my noble friend agree with me that a good tax, if there is such a thing, is likely to be an old tax and that an old tax is likely to be a good tax. That is the case here. Property cannot run away. The ownership of property is a matter of record. Someone always owns up to owning property and therefore the tax is collectable. In any event, this idea was tested in the general election and the party which advocated it was soundly defeated.

Lord McKenzie of Luton: My Lords, the noble Lord presses me on a matter that I thought I had dealt with. There are a number of ifs in his question and we have to wait to see what Sir Michael Lyons says in his report. When we know what the recommendations are, we can give the Government's response.

Lord Evans of Temple Guiting: My Lords, I agree with my noble friend. Access is of critical importance. Noble Lords will know that it was this Government who abolished entrance fees in order to increase the number of people visiting museums. On looking at the figures on theft, it is fascinating to see that most thefts occurred in places in museums where the general public do not go—areas that are not of great interest to them.
	A great deal of money is spent on museum security, which has been a constant during the past four or five years. If there is a problem with a museum, as there was with the V&A last year, additional resources are given to that museum to enhance its security.

Lord Davies of Oldham: My Lords, this is, of course, a matter for the BBC and not for the Government. Live digital broadcasts are delayed by a second or two when compared to analogue and by up to seven seconds for radio streamed via the Internet. While that slight and relative discrepancy is not a big issue for most viewers and listeners, it will obviously be a concern for those who rely on the six pips in order to get the time accurate to the second. There is no obvious solution. Even if the BBC were to broadcast the signal slightly earlier, there still would be an unavoidable and unpredictable delay occurring at the receiver end that was variable from one product to another.

Baroness Bonham-Carter of Yarnbury: My Lords, according to a sports-loving friend of mine, there is some benefit to the delay. Apparently, if you nip quickly from a Sky digital broadcast to a BBC analogue one, you can see an instant replay. That sounds a little macho to me, but he swears that that is the case.
	On the move from analogue to digital on the national scale, it is to be welcomed that SwitchCo has now been launched to oversee the process and that we have a timetable. But can the Minister indicate what the Government propose to do, when analogue broadcast is finally switched off, to help for those who either cannot afford or have chosen not to buy the necessary equipment to allow them to receive a digital signal? Is their switchover a cost that the Government envisage the BBC carrying?

Lord Avebury: My Lords, while noting the serious allegation made by Amnesty International that the Government are breaking the law by detaining people when there is no prospect of their removal or danger that they will abscond, will not the noble Baroness at least consult the UNHCR with a view urgently to produce a solution to the problem, thus ending unlawful detentions and complying with the UNHCR guidelines which have been in force since June 1999? Further, will she commission a report from an independent lawyer to be selected in consultation with the UNHCR on how the procedural and financial constraints on the availability of legal aid described in this report could be adjusted so as to ensure that detained asylum seekers receive effective legal advice and access to bail, in particular when they are outside London or in the deserts for the provision of legal aid in the north and elsewhere?

Lord Goldsmith: My Lords, I beg to move that this Bill be now read a second time.
	Far from being a victimless crime, fraud is an indiscriminate crime that wreaks long-term damage to UK business and, wider still, fraud hits the pockets of every member of the population. In 2000, the National Economic Research Associates estimated that fraud cost the UK economy more than £14 billion. That means that every person in the UK lost £230 because of fraud. Moreover, that figure, which has no doubt increased since then, does not reflect the part that fraud plays in facilitating other crime types. There are signs that fraud is becoming a crime of choice for organised crime and terrorist funding. Reforming the law forms part of the Government's overall strategy to combat fraud.
	The Bill has had a long gestation period, which reflects its complexity rather than its size. It deals with difficult and important issues which merit careful consideration.
	It is a peculiarity of our law that it recognises no offence of fraud as such. Instead we have statutory offences of deception, which are too precise, overlapping and outmoded to give effective coverage over the breadth of frauds committed today.
	The Fraud Bill is the culmination of a process of careful consideration. In 1998 the Home Secretary asked the Law Commission to consider the introduction of a general offence of fraud. The Law Commission's report on fraud published in 2002 concluded that the existing law could be improved in several respects.
	Over-particularisation of the offence has left the law of fraud vulnerable to technical assaults and can pose operational problems. The specific nature of the offences as they stand means that it is possible for behaviour which we would all recognise as clearly fraudulent to fall none the less outside the jurisdiction of the offences.
	One example cited by the Law Commission is the case of Preddy, where the defendants made false representations when applying for mortgages. They were charged with the offence of obtaining property by deception, which requires that they obtained property "belonging to another". But it was held that what they in fact obtained were credit balances to their accounts. These were property—they were choses in action—but they did not belong to another because they were new items which had not previously belonged to anyone at all. In fact, that particular problem has been fixed, but it is illustrative of the kind of problem that can arise in this area in the view of the Law Commission.
	A second difficulty that arises from over-particularisation of the offences is that it is not always clear which offence should be charged at the outset. Defendants have successfully argued on a number of occasions that their particular deceptive behaviour did not fit the offence with which they had been charged.
	The reliance on deception also restricts the application of the existing offences, particularly where a gain is not clearly made by that deception. So, for example, if a seller accepts a credit, a debit or a cheque guarantee card in payment for goods or services, he may have little interest—he need have very little interest—in whether or not the holder has the authority to use the card because of the nature of the guarantee which is attached to it, but the case for deception may turn on alleging a false representation being made by the presenter of the card in regard to that matter.
	There are other problems with machines and computers. For example, can a machine, which has no mind of its own, be "deceived"? The more we use machines to obtain goods and other services, the more this difficulty arises.
	The Law Commission also identified limitations in claiming that a defendant who abuses his position—this is an important issue—to make a gain or cause a loss is guilty of an offence of fraud. It can be argued that there is no deception because the defendant was in a position of trust at the time when the gain was made. Equally, a victim who is in complete ignorance of a loss after the event because information has not been disclosed may have some difficulty in proving that a deception had taken place.
	These were the kind of issues identified by the Law Commission and it proposed the changes which formed the basis of the Government's consultation paper issued last year. The reactions to that consultation showed a broad consensus and added much to the formulation of the Bill. The Government are extremely grateful to those who responded to the consultation paper. The responses were full, thoughtful and detailed.
	Key stakeholders have supported the Bill. The Fraud Advisory Panel, for example, which is a body representing a wide range of fraud specialists, said that it warmly welcomed the Bill, and Commissioner James Hart of the City of London Police, speaking for the Association of Chief Police Officers, said that the Fraud Bill would,
	"significantly aid the case preparation and prosecution process and accurately set fraud and economic crime in the context of other criminal activity".
	So what does the Bill do? It proposes that in England, Wales and Northern Ireland the existing eight deception offences in the Theft Acts should be replaced with a general offence of fraud. It aims to produce a clear and robust framework which is flexible enough to deal with increasingly sophisticated kinds of fraud.
	The three ways in which fraud can be committed are set out in Clauses 2 to 4 of the Bill. A basic requirement of all of them is that the behaviour of the defendant must be dishonest. There is a further requirement that the defendant's intention must be to make a gain or cause a loss to another. But there will no longer be any need to prove in what form he intended that gain to be realised, that a gain or loss had actually been realised, or that any victim was deceived by the defendant's behaviour. The offence carries a maximum of 10 years' imprisonment.
	I turn now to the three ways in which the general offence can be committed. It can be committed, first, by false representation in any form; secondly, by failing to disclose information to another person where there is a legal duty to disclose the information; and, thirdly and lastly, by the abuse of position—that is, by taking advantage of a position where one is expected to safeguard another's financial interests.
	In addition to the general offence of fraud the Law Commission recommended a new offence of "obtaining services dishonestly" to replace the current Theft Act offence of "obtaining services by deception". That is to be found in Clause 11 of the Bill.
	Clause 6 represents an addition to the Law Commission proposals which was made following consultation with stakeholders. It introduces a new offence of "possessing articles for use in frauds" to replace, so far as fraud is concerned, the provision in the Theft Act 1968 which makes it an offence for a person to have with him, when not at his place of abode, any article for use in the course of any "cheat", which the Act construes as an offence of obtaining property by deception.
	The current restriction to possession of such articles outside the abode of the defendant is unhelpful in relation to modern frauds, which can easily take place, for example, from home computers. The new offence of possessing articles for use in frauds will therefore have no such restriction.
	The offence carries a maximum sentence of five years. There will be a greater sentence of 10 years for the additional offence in Clause 7 of making or supplying such articles. We have introduced that offence to tackle the people—some of whom are members of organised criminal gangs—behind sophisticated operations involving the making of such articles.
	Clause 9 follows a Law Commission recommendation from its 2002 report on multiple offending by creating an offence parallel to the fraudulent trading offence in Section 458 of the Companies Act 1985, which will cover businesses other than registered companies. This recommendation was supported by the Office of Fair Trading in its position paper on bogus trading published in 2004. This "activity" offence carries procedural and evidential advantages as it is not necessarily limited to specific transactions and there is no logic in limiting its application to companies. That offence and an offence under Section 458 will carry a maximum sentence of 10 years to match the sentence for the general offence of fraud.
	As I said, the response to the Government's consultation paper last year showed widespread support for the Bill's proposals. There were some reservations and the Government have amended the Bill to meet the main points raised. The greatest reservation—to which, no doubt, noble Lords will wish to make reference—was caused by the initial proposal to repeal the common law offence of conspiracy to defraud. In the consultation, however, many—indeed, I think the majority—argued that it would be wrong and rash to remove the offence because it provides great flexibility in dealing with a wide variety of frauds. We recognised, in the light of the consultation, that the common law offence has advantages and works well in cases involving multiple offenders and offences, where there can be hundreds of possible counts.
	A recent case of conspiracy to defraud, by way of example, involved a large number of individual victims, several banking institutions and the integrity of those banking institutions. The illicit turnover was something like £4.5 million every six weeks. It involved organised crime and international money laundering.
	The Government listened to the arguments that it is not practical, or as practical, to prosecute such cases using substantive counts or statutory conspiracy. The indictment could run to several hundred counts or several statutory conspiracies, creating a risk that the full picture would be lost in a morass of detail.
	Conspiracy to defraud allows the agreement that is the essence of the conspiracy to be reduced to one short, well drafted count that reflects the totality of the criminal enterprise. In addition, there is some conduct that can be prosecuted only as a conspiracy to defraud; for example, cases in which the defendant is ignorant of the details of the fraud and therefore may not be guilty of statutory conspiracy to commit fraud. So in the light of the points put forward, we accepted the case for retention for the mean time.
	The Government have also made changes in the light of the consultation to ensure that the offence in Clause 3 of failure to disclose information will be fraud only when a legal duty is breached. We accepted the arguments of those who said that to include other types of case, where the duty was only moral, would be stretching the criminal law too far and would intrude on the principle of caveat emptor.
	We have also removed the requirement for secrecy which initially formed part of the offence in Clause 4 of committing fraud by abuse of position. This was a particularly difficult issue because secrecy, arguably, is a hallmark of fraud. But we accepted that it would be an unnecessary complication for the prosecution and that the dishonest behaviour of the defendant and the abuse of his position with a view to make a gain, or cause a loss, should suffice to constitute the offence.
	The Fraud Bill, as presented for debate today, has been developed through an extensive review process, involving consultation and dialogue. Early on in the life of the Bill, the Government engaged stakeholders, practitioners and the judiciary to develop a Bill that is up to date and, we hope, fit for purpose. The rationalisation of offences will assist fraud investigators and improve the prosecution process as clarification of the law of fraud will weaken the scope for technical argument.
	Fraud is a common crime. In 2003, 13,881 defendants were proceeded against for the deception offences which will be repealed by the Bill. So the cumulative effect of the improvements we are bringing forward will be considerable.
	This legislative reform is only part of the Government's strategy in combating fraud. For their part, the Government have already taken a number of other measures. The Domestic Violence, Crime and Victims Act 2004 contains provisions that will enable multiple offenders to be brought to justice for the totality of their offending.

Lord Goldsmith: My Lords, the answer to those questions are yes and no, and for the reasons I gave in opening this debate. Yes, it is important to simplify the law of fraud. No, it is not enough, for the reason I gave to my noble friend Lord Clinton-Davis. The facts and the evidence are complicated; the law is complicated, but that is not what causes trials to run into months and months. As to conspiracy to defraud, I have explained that as the majority of responses to the consultation were against removal of the offence of conspiracy to defraud, the Government took the view they did. I see that the noble Lord, Lord Kingsland, disagrees with me. I look forward to hearing what he has to say about it; he will put me right, as he always does.
	I have referred to the other measures that we have taken, such as the multiple offender provisions in the Domestic Violence, Crime and Victims Act 2004. Additional resources have also been provided for the Serious Fraud Office and the City of London police to tackle fraud. The creation of the Serious Organised Crime Agency will introduce a new force in tackling and defeating serious and organised crime. That will include proposals to ensure effective incentives for criminals who give evidence against their associates. That will help in fraud cases.
	As I announced yesterday—I have referred to it again today—the Government plan to invite both Houses to bring into effect Section 43 of the Criminal Justice Act 2003, allowing prosecutors to apply for trials to be conducted without a jury in very long, complex, serious fraud trials.
	The Government believe that these measures, along with the overall modernisation of the law, will help to streamline our capacity to tackle fraud and hence make an important contribution to tackling fraud and the crimes facilitated by it. I commend this Bill to the House.
	Moved, That the Bill be now read a second time.—(Lord Goldsmith.)

Baroness Anelay of St Johns: My Lords, we support the principle behind the Bill. It will be useful in simplifying and thereby, one hopes, strengthening the law on fraud. We have always made that position clear throughout our debates on the Criminal Justice Act 2003 and subsequently.
	Much can be done to improve the conviction rate of those who commit fraud, without removing the right of the citizen to jury trial in serious cases. The Attorney-General referred to the Statement that he made yesterday. We have already been reminded of that in some of the main points raised in interventions today. That is a matter of detailed debate for another day.
	In opening for the Opposition on this Bill, I should say that we have faith in the jury system, where citizens play their role in our criminal justice system in such an exemplary manner. The public, of course, have confidence in decisions made by juries.
	It is important to see the proposals in this Bill as one building block in the wall of improvements that can be made. The noble and learned Lord referred to some of the steps that the Government have already been trying to take towards improving the way in which cases may be brought effectively to a conclusion. One can look at better conditions for juries overall. The noble and learned Lord referred yesterday to practice directions. That will mean that, very shortly, if the Lord Chief Justice's directions are followed, fraud trials should not last for three months. There should be further training for judges. There should perhaps be more appropriate allocation of cases. I am aware that it is sometimes the case that a judge may have very appropriately and successfully handled a fraud case, but that he may never have had another case allocated to him in the whole of his career. Perhaps some expertise is being left to wither on the vine.
	We need research into the way in which juries function. I know that the Government have been looking at that as well. Above all, far more effective, pre-trial management of the case is needed. The issues should be sorted out more clearly. Very few cases, I understand, require people to look at balances sheets and statements; it is more a matter of issues being sorted out. It is a case of "Who did what when?" and "Was it illegal?" The noble and learned Lord shakes his head, but I am told by those who have experience in these matters that cases need to be managed and presented more clearly.
	As I have been made aware by submissions from the police and by their response to the Government, there is a need for sufficient police resources to investigate the offences in the first place. I have much sympathy with the police forces which are tasked with investigating those cases that are not referred to or taken up by the Serious Fraud Office. Police resources for fraud cases have to compete with those needed for violent crime. The Government's introduction of the Violent Crime Reduction Bill this week signals that they accept that violent crime has increased.
	I was grateful to the Norwich Union for its helpful briefing this week. In 2004, it identified and prevented 15,000 insurance frauds. Of those, it estimates that 4,000 would have met the criminal level of burden of proof, but it has to be very selective about what it refers on to the police because of police resources. So it submitted 41 fraud complaints to the police. Generally, those involved organised crime or links to other serious crime, where it believed that the evidence that it could submit to the police was overwhelmingly persuasive. Of those 41 cases, 27 were subsequently investigated by the police. Eighteen came to court and all of them resulted in convictions. Those statistics offer an interesting guide to the level of crime in the fraud field. The noble and learned Lord has very properly referred to the importance of having the resources properly to filter and get the cases to court for resolution.
	So I was intrigued to note that paragraph 3 of the Government's response to the Law Commission's report stated on the matter of police resources:
	"It—
	the Government—
	"is taking measures in partnership with local government and the private sector to bring new resources into play. We were very grateful for the offer from one respondent to provide some additional resources for the police and discussions are under way to see if a suitable project can be found".
	Will the noble and learned Lord explain what the Government are planning and what progress has been made since last November on this project? It sounds like the privatisation of some kind of investigation into selected fraud cases. How practical are those plans and what level of development have they reached?
	In the debate on the Criminal Justice Act, we gave our commitment that we would work constructively with the Government to find ways in which we could make the jury system in fraud trials work even better than it already does. We are going to support sensible reform of the law on fraud, but we will study carefully this Bill throughout all its stages to ensure that the Government's proposals reduce the opportunity for injustice being done.
	As the noble and learned Lord mentioned, fraud in the UK is indeed seriously damaging to the country, to companies and individuals alike. We are all vulnerable to the devious fraudster. Fighting fraud effectively matters. The Fraud Advisory Panel estimated in 2004 that the annual cost of fraud in the UK equated to the value of £240 for every man, woman and child. I notice that the noble and learned Lord referred to £230. I think we can forgive £10 between friends, or perhaps friends on occasions. It is a lot of money. The National Criminal Intelligence Service estimates that fraud contributes as much to UK organised crime as drug-related offences. It is a horrifying figure.
	The main focus of this Bill is the creation of a single offence of fraud, which we support and believe should make the law more comprehensible. At present, juries cannot be given a single, straightforward definition of fraud. The current statutory offences are too specific to offer a comprehensive definition, while the common law offence of conspiracy to defraud is so wide that it offers little guidance on the difference between fraudulent and lawful conduct. That observation, to which the noble and learned Lord, Lord Ackner, has referred, was made by the Law Commission.
	At present, serious fraud indictments may need to employ a number of different offences before the alleged fraudulent behaviour is fully covered, thus leading to long and potentially confusing trials. So the fraud offence in this Bill, which follows the Law Commission's recommendation, seems to be the right approach. It offers a single, comprehensive definition of criminal fraud, which can be used to make fraud indictments simpler and more self-explanatory. This should enable juries to focus on whether the facts of the case have been proved beyond reasonable doubt and to apply them to a simple, readily understandable definition of the offence.
	The second advantage that should flow from a general offence of fraud is that it would be a useful tool for the prosecution of fraud from investigation through to trial. The present clutch of specific offences can result in the wrong one being employed, either at the police station or at court, when the facts of the case actually fit a different offence. A single offence which gives a clear definition of fraudulent behaviour should help to focus investigations and ensure that the right charge is put to the right defendant.
	The third major advantage of the single offence is that it should make the law more able to adapt to the changing face of fraud as technology opens up new avenues to fraudsters to practise their crimes across cyberspace. The first limb of the single offence has the advantage of tackling the IT-borne offence of phishing, while also covering the old and detestable crime of the knocker on the doorstep, tricking people—mostly the elderly—out of their valuable possessions for a pittance.
	I look forward to examining the drafting of the new offence in Committee and to probing further the objectives and consequences of the new offences in the Bill, which seem at first blush to have much merit. The noble and learned Lord has referred to them, so I shall not cover them in detail. They comprise: the possession of articles for use in frauds or being involved in their manufacture or supply; extending to sole traders the offence of participation in fraudulent trading; and the Clause 11 offence of obtaining services dishonestly.
	One of the key recommendations of the Law Commission's report was that the Clause 11 offence of obtaining services dishonestly should sit alongside the new, general crime of fraud. A key advantage of that would be that it would circumvent the existing problem that arises under the offence of obtaining by deception in respect of automated services provision. This is perhaps a gift to Mr Rupert Murdoch, who will no doubt welcome this measure as weapon against those who try to get access to his digital channels by using illegal decoders to avoid paying a subscription to him. I pay two subscriptions to him. I certainly would never dream of avoiding paying as a customer. I wonder, however, how heavily the investigation of such offences will fall upon police resources.
	In the light of the creation of the new single offence of fraud, it is astonishing that the Government have decided to retain the old and flawed offence of conspiracy to defraud. The Law Commission very clearly and firmly called for its repeal. The Government's own report last October noted that:
	"It is normally fundamental to a codification exercise such as this, that the common law should be repealed in favour of the new statute".
	My noble friend Lord Kingsland, who is leading for us on this Bill, will address the issue of conspiracy to defraud in detail further on. If the Government are determined to retain the conspiracy offence, surely we should at least bring it up to date to ensure that it is fit for purpose in the modern day.
	There is one line of inquiry that I would like to examine in Committee, and in a helpful spirit I give notice of it very briefly now. I refer to the exemption given to married and civil partners in Section 2(2)(a) of the Criminal Law Act 1977. The consequence of that section is that if the husband and wife, or civil partners, are the only persons who conspire together to commit a fraud, they cannot be convicted—they get away with it—because the activity is not in itself an offence. They have to conspire with somebody else before it becomes an offence.
	The rule causes real problems. If a jury is not satisfied that there was another party to the conspiracy, it has to be directed to acquit the husband and wife—or in future, of course, the civil partners. Can that really be right in the 21st century? It harks back to the days when a wife was considered the chattel of her husband, unable to exercise her own will. As I approach my own 30th wedding anniversary, I can say that I am no chattel.
	In conclusion, we shall support the proposals in this Bill if they make the law of fraud clearer and more straightforward. We believe that if we can achieve that improvement, everybody concerned in the process, whether they are jurors, police, victims, defendants or lawyers, will be better placed to understand who has committed a crime and who has not. That can only be of benefit to us all.

Lord Thomas of Gresford: My Lords, it is a pleasure to deal with a piece of legislation which has had so much considerable thought devoted to it, and a long period of gestation, as the noble and learned Lord said in his opening remarks. It has been considered by the Law Commission and the Government's respondees on consultation, and now, finally, it is being considered in the Bill before the House. It is a Bill that is clear in its terminology and intent. Whether it has all the ingredients quite right is a matter that we shall debate both today and in Committee, but the general thrust of the Bill is in the right direction. In particular, the Bill avoids a tortuous definition of fraud, establishing as it does three basic areas within which the Government hope that the generality of charges will fall.
	The Explanatory Notes on Clause 2, which deals with false representation, make a number of interesting and useful points. In the first place, the representation "must be made dishonestly", as in the leading case of R v Ghosh. The Ghosh test is referred to at length in the Law Commission's report. In replay of yesterday's argument, I remind your Lordships that that test is, first, whether the defendant's behaviour would be regarded as dishonest by the ordinary standards of reasonable and honest people and, secondly, whether the defendant was aware that his conduct would be regarded as dishonest by reasonable and honest people. So while emphasising that it is essentially ordinary and reasonable people who decide what honesty and dishonesty is, on the one hand, the Government on the other hand—ironically—propose to alter that test in certain cases so that a judge will ask himself, "Would that conduct be regarded as dishonest by me, a traveller on the Clapham omnibus as I always am?". That is a totally different sort of test from the Ghosh test.
	The representation in Clause 2 can occur in written or electronic form. We are pleased to see that the ambit of criminality has been widened quite substantially to bring the charge into line with current forms of deception and fraud. I refer, as previous speakers have, to the misused credit card. It is a good thing also that it is immaterial what the person on whom the fraud is being perpetrated thinks. The person who accepts the credit card has no idea whether it is valid; only the person presenting the card has that information. The fact that the defendant knows that he is misusing the card will be sufficient under this Bill. As the noble and learned Lord the Attorney-General pointed out, that is very important when so many commercial transactions, particularly in the consumer field, are conducted through the use of machines, in one way or the other.
	That point touches on the very serious issue of identity theft. I take this opportunity to emphasise the utmost misery that identity theft can bring on its victims. There is no real remedy at present: the banks are unable to address the issue properly, because there is no networking between the banks to ascertain names of victims whose cards or whose details have been stolen. In many cases, police officers at police stations, who may be less than sympathetic, discourage a criminal report. Most of the time a victim cannot prove with immediate ease the fact that he did not consent to what happened, or that he did not incur a specific expenditure.
	Banks sometimes issue new debit or credit cards, but that is of little consequence, as the defrauders continue to apply for additional cards—and all too often those applications are granted, without any further confirmation. Another problem with identity theft is that it can be used and furthered abroad. Again, there is no form of protection—there is nothing worse than having an identity stolen by a person getting hold of passport details. I make those comments because it seems to me that one of the excellent intentions behind the Bill is to address that sort of problem.
	The emphasis in Clauses 3 and 4 is on dishonesty and intention on the part of the defendant, and not on recklessness. That is something of a relief for those of us who have had to deal with the concept of recklessness over the years.
	Clause 3 deals with failing to disclose information. The wording does not follow that of the Law Commission draft, however, which used the expression "wrongfully", both in the title and in the body of the draft clause. The Law Commission also defined how "wrongfully" was to be interpreted, in paragraph (a), where there is a duty to disclose, and paragraph (b), where he knows that the other party is trusting him to disclose. I wonder what the thinking is behind the Government's decision to drop the word "wrongfully" from the position that it held in the Law Commission's draft Bill.
	By contrast, the new clause, which has come into being since consultation, as the noble and learned Lord told us, does not mention dishonesty at all. It seeks to replay Section 25 of the Theft Act 1968, on going equipped. In that Act, the wording was that:
	"A person shall be guilty of an offence if when not at his place of abode, he has with him any article for use in the course of or in connection with any burglary, theft or cheat".
	There is a presumption that if the article was in his possession, it was evidence that he had it with him for such use.
	Clause 6 introduces the concept of the defendant having an article,
	"in his possession or under his control".
	No statutory defence is suggested in the Bill that he did not know or had no reason to suspect that the article was for use in a fraud, although the Explanatory Notes suggest that knowledge that the article was for such use is an ingredient. They say:
	"A general intention to commit fraud will suffice".
	The expression,
	"in his possession or under his control",
	has caused great difficulty, certainly in the field of firearms and drugs legislation.
	There is strict liability in both those fields. I am seeking to find out whether that is what is proposed in Clause 6. For example, in the case of Vann and Davis, in 1996, it was decided that since the clear purpose of firearms legislation was to impose a tight and effective control on the use of highly dangerous weapons, Section 5 of the Firearms Act, on its true construction, made it an offence knowingly to possess an article that was in fact a prohibited weapon, and it was not necessary for the prosecution to prove that the defendant had known that it was such a weapon. It would be no defence in firearms legislation for him to prove that he had not known and could not reasonably have been expected to have known.
	Similarly, in drugs legislation, in the case of Lambert, in 2001, the Judicial Committee was concerned whether it was an essential element of the offence of possession of a controlled drug under the Misuse of Drugs Act 1971 that the accused knows that he has a controlled drug in his possession. The noble and learned Lord, Lord Slynn of Hadley, pointed out in that case that the prosecution must prove that the accused had a bag with something in it in his custody or control, and that the something in the bag was a controlled drug, but it was not necessary for the prosecution to prove the accused knew that the thing was a controlled drug let alone a particular controlled drug.
	Those are in areas of serious crime—really serious crime where drugs and firearms are a danger. However, the wording of Section 6 is such that it seems to be added to that category of cases.
	Clause 7 does indeed introduce the concept of "knowledge" in subsection (1)(a). I would invite the Minister to include in Clause 6 the words "knowledge" or "knowingly", expressly so that there can be no argument about it. It should not be enough for the prosecution merely to prove that a person has an article in his possession for use in fraud. The prosecution should prove that he knew it was for use in fraud. I think that that is a very important omission. If the omission is intentional, I should be glad to know why.
	In Clause 9, the offence is to be,
	"knowingly a party to the carrying on of a business to which the section applies",
	and the Explanatory Notes say specifically that the principles established with regard to fraudulent trading will apply. Looking at Clause 9, I have this question. One of the principles with regard to fraudulent trading is that the offence can be committed only by a person who exercises some kind of controlling or managerial function within the company. Is Clause 9 to be interpreted in the same way? If it is and the person charged must have some kind of controlling or managerial function, can we not sensibly have that on the face of the Bill?
	The common law offence of conspiracy to defraud has been maintained. The issue then arises, which I am sure others will address: what areas are the common law offence intended to cover which are not covered by the specific offences? Here we have a broad definition of fraud which is satisfactory, so why do we have to retain the common law offence? The Law Commission was concerned that the common law offence of conspiracy to defraud might cover conduct such as failing to fulfil a contractual obligation or infringing a legal right and that conspiracy to defraud at common law could impose criminal liability for what would otherwise be civil wrong or torts. At paragraph 9.4 of the report, the Law Commission said:
	"To retain conspiracy to defraud on the ground that it might occasionally prove useful in such a case would in our view be an excess of caution. Since it is not practicable to identify all such cases in advance, it would mean that we could never be in a position to abolish conspiracy to defraud . . . The advantages of abolishing it, in our view, greatly outweigh any possible advantage that might accrue from retaining it alongside the new offences which we recommend".
	I emphasise the words "greatly outweigh". What has happened in the consultation process that has reversed that standard so that it is now advantageous to maintaining what is the most vague concept? A conspiracy to defraud is the vaguest concept, and yet here we are trying to clarify matters for the benefit of a jury, or even for a judge alone, so that people can understand what the ambit of a particular offence is.
	The noble and learned Lord said that the Government's intention is to retain conspiracy to defraud at common law "for the meantime". How long is the "meantime"? If he says "for the meantime", why does he envisage that at some unknown future date it will become all right to abolish that offence? Why not do it now?
	I hope that I have indicated my general support for the Bill. I hope that I have indicated the areas where I have criticisms, and I hope there will be answers to those criticisms. I end with this. If judges are to be permitted to sit alone in fraud trials, surely it would be useful for that to be a part of the Bill. Then it would clearly ring-fence the type of case which would be tried by judge alone to fraud, and we would not have the fear which we expressed yesterday that trial by judge alone will be extended to all sorts of areas which at the moment we are not told about.

Lord Lloyd of Berwick: My Lords, it seems to me that this is one of the best Bills to have come out of the Home Office for many a long year. I did not read the Law Commission report when it was first published in 2002 but I have read it since. It seems to me that it is a model of what such a report should be. It is very well researched. It is very well argued. It exposes with great clarity the many defects in the existing state of the law. Above all, it contains a draft Bill; so much so that I sometimes think that all we actually need to do is to compare the draft Bill in the Law Commission report with the Bill which is now before the House. That is all that I have done.
	That brings me to the government response to the Bill, which again is excellent. I obtained it this morning by a miracle—a miracle for me—on the Home Office website. It seems to me again a model of what a government response to such a report should be. It suggests a number of small changes: improvements in Clauses 2(2) and 3(1) and in the omission of the word "secretly" in Clause 4(1)(b), with all of which I would agree. All that is to the good.
	However, as Horace, I think, says—it is usually Horace:
	"Nihil est ab omni parte beatum".
	There is a flaw, and the flaw is the one which the noble and learned Lord the Attorney-General has already foreseen, and it is one which has been independently foreseen by three previous speakers: the failure to abolish the common law offence of conspiracy to defraud—as strongly recommended by the Law Commission.
	I say at once that I have an instinctive dislike, and I think that many judges have, of these catch-all offences such as conspiracy to defraud. Of course, as the noble and learned Lord the Attorney-General has pointed out, it makes it easier for prosecutors, but that surely is the whole danger.
	It seems to me that offences of such generality, and so amorphous as conspiracy to defraud, offend against one of the more fundamental principles of our judicial system: the principle of legal certainty. How can anyone know whether they are guilty of a conspiracy to defraud until it is too late as far as they are concerned? So I urge the Government to think again on that point.
	There is a practical argument. We now have good new offences which I greatly welcome. Surely it ought to be a working rule for the Government that for every new offence that they create they should repeal at least two old offences. Here they have a chance to repeal the old common law offence of conspiracy to defraud, and I hope that they will think again before the matter comes to Committee.
	There is a very strong recommendation in the report on that, but it is the weakest point in the Government's response. It said that there were differing views as to whether there should be a conspiracy to defraud. There was a reference to a case in the House of Lords called Hollinshead, which is not a shining example of English jurisprudence. Indeed, it underlines the danger of having an offence such as that still as part of our system. If no one else does, and I suspect others will, I will certainly wish to table an amendment in Committee to restore the views of the Law Commission on that point. I would be willing to agree to the compromise proposal, as referred to in the Government's response, that we should abolish common law conspiracy now, but perhaps not bring that part of the Bill into force until we have seen how the rest of the Bill works. That seems a sensible compromise.
	The only other point that I want to make is on the concept of dishonesty. I am glad that dishonesty has been chosen as the basis of the new offences. I am indeed glad that there has been no attempt to define dishonesty in the Bill, nor should there be. At this point, I declare an interest as the author, or at any rate the part author, of the decision in Ghosh. When Ghosh came before the court, I was being led by the Lord Chief Justice, the noble and learned Lord, Lord Lane. He takes the credit, although I may have done the work. There had been a long-running dispute as to whether the test of dishonesty is subjective or objective. There have been many conflicting decisions in the Court of Appeal, which the lawyers here will recall. In Ghosh, we decided that it was both objective and subjective. That simple approach seems to have silenced everyone from then until now. Some of the academics did not like it to begin with, but it has stood the test of time since 1982, although it has never been formally approved in the House of Lords.
	It is referred to with approval in the Law Commission report, and it is referred to in the Explanatory Notes. I hope that the noble and learned Lord the Attorney-General might say when he comes to reply that the Ghosh approach is the basis on which we are being asked to enact the Bill. I hope that is not pushing my pride of authorship too far. I certainly would not support a Bill in which the test of dishonesty was to revert to the old-fashioned objective test. I hope that the noble and learned Lord the Attorney-General will be able to say, "We are enacting this Bill on the basis that Ghosh is the law as we understand it".

Lord Kingsland: My Lords, I join all noble Lords who have complimented the Law Commission on its remarkable report and, particularly, on the proposed Bill that they published at the end of it. We, as my noble friend Lady Anelay has said, support this Bill and congratulate the Government on bringing it forward.
	However, it contains one major flaw; that is, the continuation of the offence of conspiracy to defraud. The noble and learned Lord the Attorney-General said, in his opening speech, that if he got something wrong, he knew that I would put it right. Fortunately, I rarely have to utilise that corrective mechanism; and it may be that on this occasion I shall be in error in attempting to do so.
	However, the noble and learned Lord did indicate that a majority of those who were consulted supported the continuation of the offence of conspiracy to defraud. But that conflicts with the information that I received from his department. I may have misread or misunderstood the information, but my belief is that Liberty, the Criminal Law Solicitors' Association, the Institute of Counter Fraud Specialists, the International Underwriting Association, the London Criminal Court Solicitors Association, HM Customs and Excise, the Audit Commission and the Institute of Legal Executives all supported the abolition of the offence of conspiracy to defraud.
	The two main supporters of its continuation were, not surprisingly, the CPS and the Serious Fraud Office. One would expect those organisations to want the continuation of that offence. It makes writing indictments much easier. But it is astonishing that the Government have given in so easily to these pressure groups. One of the main themes of the Government's support for the Bill is that they produced a new comprehensive definition of fraud. At no stage during the opening speech of the noble and learned Lord the Attorney-General did he indicate any chink in the armour of that new definition. Nor is there any indication of such a gap in the Law Commission's report. Indeed, were there to be such a gap, I am sure that the noble and learned Lord would have sent both the Bill and the report back to the Law Commission and asked it to redefine the general offence.
	It is sad, after all the work done by the Law Commission, that the Government have not had sufficient confidence in the intellectual quality of its work to back its conclusions. The result will be exactly what the noble and learned Lord, Lord Mayhew, said recently in a different context. The disease of overloaded indictments that confuse both juries and defendants—and sometimes the prosecution, too, to say nothing of the judge—will continue due to this unnecessary and confusing retention.
	It is important that the case that the Law Commission make for abolishing the conspiracy to defraud offence is well understood. The Law Commission describes conspiracy to defraud as one of the two principle defects of the current law. The concept of fraud, encapsulated in the definition of conspiracy to defraud, is wider than the range of conduct caught by any of the individual statutory offences involving dishonest behaviour. This means that it can be criminal for two people to agree to do something which it would not be unlawful for one person to do.
	The Law Commission concluded that conspiracy to defraud was far too wide in its scope,
	"in that it catches agreements to do things which are rightly not criminal".
	Its report states that the cases on the meaning of "to defraud" have given it an extensive meaning, so that any dishonest agreement to make a gain at another person's expense could form the basis of a conspiracy to defraud. The Law Commission states,
	"we take the view that this definition is too broad".
	That is because we live in a capitalist society which, by its nature, revolves around the pursuit of gain at the expense of competitors. Such behaviour is perfectly legitimate; it is only the element of dishonesty that renders it a criminal fraud. In other words, dishonesty, as the noble Lord, Lord Thomas of Gresford, reminded us, does all the work in assessing whether particular facts fall within the definition of the crime.
	Moreover, there is no statutory definition of dishonesty. The case of Ghosh, in which the noble and learned Lord, Lord Lloyd, participated so memorably, provides that the jury must be satisfied both that the defendant's conduct was dishonest according to the ordinary standards of reasonable and honest people; and that the defendant must have realised that it was dishonest according to those standards. Therefore, activities that might otherwise be legitimate can become fraudulent if a jury is prepared to characterise them as dishonest. That delegates to the jury the responsibility for defining what conduct is to be regarded as fraudulent; and it leaves prosecutors with an excessively broad discretion when they are deciding whether to pursue a conspiracy to defraud case.
	The Government's consultation document stated that the common law crime of conspiracy to defraud was defined "very broadly" and that as the,
	"element of dishonesty is left to do all the work",
	this left,
	"the range of the offence . . . unfairly uncertain and wide enough potentially to encompass sharp business practice".
	In their consultation document, the Government propose to repeal that law and replace it with a general offence of fraud, which would,
	"benefit juries by making fraud law easier to understand".
	But as a result of the objections of the CPS and the Serious Fraud Office, the Government have simply caved in and agreed to keep the offence of conspiracy.
	In paragraph 5.28 of the Law Commission's report we have, in my submission, the complete answer to the Government. The Law Commission states:
	"We continue to believe that a general dishonesty offence, by not requiring as an element some identifiable morally dubious conduct to which the test of dishonesty may be applied, would fail to provide any meaningful guidance on the scope of the criminal law and the conduct which may be lawfully pursued. We do not accept the argument that inherent uncertainty is satisfactorily cured by the promise of prosecutorial discretion. This cannot make a vague offence clear and, while it might ameliorate some of the risks, it does not excuse a law reform agency from formulating a justifiable and properly defined offence. We do not believe it is for the police and prosecutors to decide the ambit of the criminal law. As the Supreme Court of the United States has said: 'A statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application, violates the first essential of due process of law'.".
	I believe that that paragraph is unanswerable. I invite the Government to think again about their decision to include conspiracy to defraud on the face of the Bill. If they continue to persist in doing so, they can be certain to meet amendments from the Opposition in the course of the passage of the Bill.

Lord Goldsmith: My Lords, I welcome the support given by all noble Lords who have spoken to the Bill. I share with noble Lords the congratulations that they offer to the Law Commission. The value of the work carried out by the Law Commission is often undervalued. It is outstanding. We do not always accept everything it says and we do not always move to legislate for what it puts forward, but I am very glad that in this House we agree that this is a fine example and one that we are proud to put forward.
	I also agree with much of what noble Lords said about the policy behind the Bill. I agree wholeheartedly with much of what the noble Baroness, Lady Anelay, said and I am very happy, at least for these purposes, to be counted as a friend. Whether the figure is £230 or £240 per head, it is an enormous sum of money that the country is losing as a result of fraud. As I said in opening, that is why it is important that we act in a number of different ways to protect the country and the economy better against fraud. In that respect my noble friend Lord Brennan made some very important observations about fraud. What he said deserves close attention in the wider debate and consideration of fraud.
	I turn to some specific points raised by noble Lords. The noble Baroness, Lady Anelay, mentioned a reference in the Government's response to the consultation paper to resources to deal with fraud. As the paper says, the Government were grateful for a particular offer that was made. I understand that that project is still under discussion. I see no reason why I should not identify by whom it was made: the Finance and Leasing Association. That association is having discussions with the City of London Police. Although that is welcome, it will be a relatively small project and not a major plank of our effort.
	Other matters are happening in relation to the resourcing. Overall resourcing for policing has increased. Expenditure on policing supported by government grant or central expenditure on policing has increased by 39 per cent—more than £3 billion since 2000–01. In the context of fraud, I refer to additional resources that have been provided by the Home Office and the Corporation of London, I am glad to say. I was instrumental in negotiating that for work by the City of London fraud squad, together with the Serious Fraud Office.
	I accept that there is an issue about the resources that have been applied to the investigation of fraud. There are a number of reasons why much fraud is not prosecuted. The noble Baroness, Lady Anelay, referred to such an instance and I believe that further attention needs to be given to such issues.
	The noble Baroness also raised a point about Section 2(2) of the Criminal Law Act 1977. I do not believe that any noble Lord would dare regard the noble Baroness as a chattel or anything close to it. She need not have denied that. Reform of the 1977 Act is not an issue for the Fraud Bill, but—this is relevant to the other big debate that we have had this afternoon—the Law Commission is looking at the law of conspiracy more generally, as part of its codification project. It hopes to issue a consultation paper early next year. At the very least I shall ensure that the point made by the noble Baroness is fed into that consideration. I believe I am right in saying that that is an issue that is already in mind, but I shall need to confirm it. The noble Baroness may still wish to pursue the matter in Committee, as she is entitled to do.
	The noble Lord, Lord Thomas of Gresford, made an important point about the misery of identity fraud. He is absolutely right that identity fraud is an increasing and very serious problem. Therefore, he is right to say that it is important that the law is able to deal with the matter by having offences that adequately cover the circumstances.
	The noble Lord may not be surprised to hear me say from these Benches that dealing with identity fraud after the event is not the only answer. Preventing identity fraud is very important too. In relation to another Bill, which I shall not be presenting to the House—other colleagues will do that—a reliable form of identification will be under consideration. I say no more about that today, but I thought it opportune to make that observation.
	The noble Lord, Lord Thomas, raised important and relevant points about a number of the clauses. We shall refer to them in Committee, but he and the noble Lord, Lord Goodhart, raised a question on Clause 3. The reason for dropping the word "wrongfully" is precisely the reason given by the noble Lord, Lord Goodhart: that the Government accepted in the consultation that they should narrow the offence so that it was restricted to a case where there was a breach of a legal duty. The consequence of that was that the word "wrongful", which was then interpreted to include other things, was not needed. I understand why the noble Lord, Lord Goodhart, wants to consider further whether the Government have gone too far in narrowing the offence. That may be a matter to which we shall return.
	On Clause 6, the noble Lord, Lord Goodhart, asked whether it was an offence of strict liability. I believe the answer is no. It is not the intention for Clause 6 to create a strict liability offence, as he said the Explanatory Notes say. The answer to his question may well lie in the fact that the particular words are followed by the words "for use". No doubt that is a matter to which we can return.
	The noble Lord also asked in relation to Clause 9 about who would be caught by the offence. It is intended that the existing case law on fraudulent trading under the Companies Act will apply to the fraudulent trading offence in Clause 9. Those include a requirement that the defendant has taken some positive steps in the carrying on of the companies business and that he exercises some kind of controlling or managerial function. The noble Lord may wish to return to that.
	On the same clause, the noble Lord, Lord Goodhart, asked what is meant by "sole trader etc.". I am sure he is right to say that it applies to any business and would include partnerships because it applies to any business not covered by the Companies Act 1985, which would include, not only sole traders, but also partnerships and trusts as well.
	The noble and learned Lord, Lord Lloyd, in welcoming the Bill, asked me to confirm that the Ghosh test will apply to dishonesty. He rightly noted that the test has had wide support and has been followed—although, as he rightly said, not yet by the Judicial Committee of this House. I can say that that is the current definition of dishonesty; it is referred to in the Explanatory Notes; no other definition is offered in the Bill. I cannot preclude your Lordships from in due course taking a different view and saying that Ghosh was wrong all along, but I have no reason to think that it is. That is the most assurance that I can give to the noble and learned Lord.
	My noble friend Lord Brennan, as well as making his observations on policy and implementation issues, which, as I said, were very important and worth noting, asked that we draw to the attention of the Lord Chief Justice the desirability, if there are appeals once the Bill is in force, that they should be dealt with swiftly so that uncertainty in the law is swiftly brought to an end. I am sure that he is right that that is important. It will be for the Lord Chief Justice to determine when and how to do that. If I may presume to say so, I should have thought that that suggestion will be treated as important and correct. My noble friend also asked about sentences for fraud. That is also an observation for the courts to consider.
	I have already attempted to deal with the specific points on clauses raised by the noble Lord, Lord Goodhart. He also made observations that it is important for us to take into account and have regard to.
	I turn to the issue raised by all noble Lords who spoke, which I had predicted would be a topic on which we would have discussion. I would not want to be so much of a spoilsport as to try to deal with all those important points today. I and the Government have been absolutely open about this. The Government saw the force of the points made in the Law Commission's report. We put the matter out for consultation and received the responses set out.
	There is a point—perhaps of detail, perhaps not—between me and the noble Lord, Lord Kingsland. I rely on what the Government said in their response and draw to his attention paragraphs 39 and 40, which state, first in paragraph 39:
	"The repeal of Common Law Conspiracy to Defraud was the only proposal to which there was widespread opposition".
	Paragraph 40 goes on to say that,
	"repeal was opposed by the majority of consultees",
	which is also the information that I have received directly. I have not counted them myself; I do not know where the noble Lord's information comes from; but we will obviously look into the matter. That is for a future date.
	I must say, however, that I—I do not take exception; I never take exception to what the noble Lord says—differ from the noble Lord when he described the Crown Prosecution Service and the Serious Fraud Office as pressure groups. They are in fact bodies charged with the duty of prosecuting in the interests of the public. If they have views on whether putting the law in one way or another will ease or make more difficult the prosecution of crime in this country, those are views to which we must pay full and proper attention.
	There are two issues, perhaps three, that we will need to consider when we return to the matter of conspiracy to defraud. The first is the practical value of the offence. We will need to explore that in more detail than is appropriate today, but I mentioned that in my opening speech.
	The second is whether there is conduct that would be caught by conspiracy to defraud that would not be caught by present offences. The noble and learned Lord referred to a decision in Hollinshead. That was an example where the conduct involved was a number of people conspiring to manufacture devices that were then used to help people avoid paying for electricity. It was held by the courts that they—that is to say, the manufacturers—could not be found guilty of conspiracy to commit the offence of obtaining the electricity by use of those devices because they were not involved in the actual abstraction of electricity. I do not comment on whether the noble and learned Lord is right to say that the decision was a bad one, but it illustrates the problem that people may be involved in conspiring to do something but not in the substantive offence because that is done by a third party who is outside the conspiracy. That is one aspect that we will need to consider.
	My third point, on which I have already touched, is that the Law Commission is publishing a report on participation in crime.

Lord Oakeshott of Seagrove Bay: My Lords, I too thank the noble Lord for repeating the Statement made in another place. As this is the first time that I have faced the noble Lord on the Front Bench, I welcome him and wish him well in his new role. The noble Lord, Lord McIntosh of Haringey, was, quite simply, a Stakhanovite, and he will be a hard act to follow.
	The faces on the Government Front Bench may change, but, not for the first time, they are here trying to defend the indefensible in the face of the devastating criticisms of the failure of the tax credit system by the Parliamentary Ombudsman and the citizens advice bureaux. Has the Minister read the chilling examples given by the CAB? I was most struck by the example of the lone parent who called at a CAB one Friday after her weekly child credit payments had been stopped without warning. She had £2 to get home and buy food for her two children and herself. I read of another lone parent who had had no tax credit payments for a few weeks; the CAB had to give her a food parcel from the Salvation Army to feed her children, as she had spent her last money on gas and electricity meters and baby foods. That happened in the fourth richest country in the world, while Gordon Brown holds us up to the rest of Europe as a shining example of a productive economy and inclusive society. Can we for one moment imagine Sweden, Holland or even France treating their vulnerable citizens like that?
	I turn to the detailed criticisms. Do the Government accept the call in the ombudsman's report for much improved communication and easier and quicker customer complaint handling? Do they accept that the Inland Revenue's assurances given to the ombudsman a year ago were over-optimistic? Do they accept the ombudsman's view that cases considered by the office represent the tip of an iceberg? Do they accept the ombudsman's suggestion that, whenever a revenue mistake or error that has led to too much tax credit being paid is identified, the customer should be immediately notified of exactly what has happened and informed of the circumstances in which recovery can be waived?
	Do the Government accept the most important practical recommendation in the ombudsman's report—it is mirrored to some extent in the CAB report, although it does not go quite so far—which is that consideration should be given to writing off all excess payment and overpayment caused by official error in 2003 and 2004? We are talking about unacceptable levels of official error. The Office for National Statistics recently reported that, of £13.5 billion paid out last year, £1.9 billion consisted of overpayments. The noble Lord heard the noble Baroness, Lady Noakes, say that, in a private business, heads would roll. Speaking from personal financial experience of running a business, I take the view that any business with such a payment system would have gone bust years ago.
	My final question is probably the most significant from the point of view of the health of the public finances and of getting Britain's system working properly as a whole. Can the Minister confirm that the contractor responsible for the serious problems with the computer system was EDS? Can he assure us that it will not be allowed anywhere near the Identity Cards Bill that the Government are trying to force through, the Second Reading of which in the House of Commons takes place next week? I look forward to hearing the Minister's answers.

Lord McKenzie of Luton: My Lords, I shall deal with the point about the error rate. The statistic that is quoted is misleading. The suggestion that overpayments are inevitably an error is a misunderstanding of what is happening in the system. It is a responsive system, which means that, if the income of a family goes up during the year by more than £2,500, there is the prospect of an overpayment. That is a consequence of the way in which the system works; it is not, in those terms, an error. The issue is how we encourage people to report changes more effectively, so that those changes can be reflected more quickly in the payments that they get. We need to see that in context.
	A fundamental issue is the assertion that is made about financial instability. It goes to the heart of the way in which tax credits are constructed. It was debated extensively in another place, and the majority there was very clear about what it wanted. The CAB, which were consulted at the time, wanted a system that was responsive and flexible and took account of changes for families during the year. I ask those on the Conservative and Liberal Democrat Benches whether they want to pull all that back and go for an inflexible, fixed, flat system that is not fair to families and does not adjust to reflect family circumstances during the year.
	A question was asked about the 800,000 families that are due to be transferred into the system. As my right honourable friend in another place explained a short while ago, the plan is still to transfer them into the system by the end of the year. We will monitor the system continuously this year to make sure that the transfer can be done safely and will report to the other place if there are any changes in the plan. I am happy to make the same assurance to your Lordships' House.
	The issue of hardship was raised. Of course there is sympathy for families that end up having to deal with repayments. But in the code of conduct and procedures of HMRC there are processes to protect people. Those need to be reviewed, and that is one of the undertakings given by my right honourable friend. HMRC paid out £170 million in 2003–04 to mitigate hardship.
	On the issue of whether the system is too complicated, in its first year of operation—2003–04—the take-up of child tax credit was about 80 per cent, which is better than the take-up on family tax credit. As I said earlier, 6 million families are benefiting. That seems to me to show an understanding of the system.
	On the ability of people to spot overpayments, they do not have to understand how the system technically works. The key to it is the data that are provided when the award is made; that is, the size of the family and the family income. Those items should be easy to spot. Nevertheless, one of the undertakings given by the Paymaster General is to review award notices to see whether they can be improved to help communication. Indeed, the noble Lord, Lord Oakeshott, asked whether we accept the issue about increased and better communication. The answer to that is "Yes". It was dealt with in the Statement made on 26 May. That must be carried through.
	On the issue of over-optimistic assurances, it may well be the case that they were over-optimistic. But as a greater understanding of how things are working in practice has developed, the Government have looked at the issue speedily and have responded.
	On the issue of whether heads will roll for this, the politicians involved have fully accounted for themselves in another place as the matter has developed. What happens to employees of HMRC is an internal matter for that department.
	All of the administrative issues raised in the ombudsman's 12 recommendations had already been covered in the Statement of 26 May, and they are being tackled. There were recommendations in respect of writing off overpayments caused by official error. They will be written off if they are the result of official error, as long as it is reasonable for the claimant to believe the payments to be accurate and appropriate.
	The recommendation to set in-year recovery rates at the same level as those for previous years is not accepted. This is part of the balance of how we deal with recoveries of genuine overpayments. The problem is that if recovery rates are limited in-year they are stacked up in subsequent years, and life is no easier down the track.
	The issue of suspension of over-payments in official error cases has been taken up. It has been announced that when there is a dispute the process of recovery will be suspended until it has been resolved.
	I think that covers pretty much all of the recommendations that were made. Crucially, most of the issues raised in the recommendations were already being dealt with as a result of the Statement of 26 May.
	Other questions were asked. I cannot reasonably comment on the matter of the contractor, EDS, and the Identity Card Bill, and I am not sure that the noble Lord would expect me to do so. I cannot give the House an answer about the outcome of the discussions with our former IT partner, but I shall see that noble Lords are written to on that subject so that they can be sure about what is happening.

Lord Barnett: My Lords, I declare a past interest as I made a modest living from complex tax systems and an even more modest living from introducing them as Chief Secretary to the Treasury.
	These are two serious reports. I know that my noble friend will not have underestimated the serious criticisms within them. I understand from what has been said that the Treasury and the Inland Revenue—although we must now refer to it in a different way as HMRC—are looking into these major problems. But if able and successful businessmen found the tax system very complex, even when they were advised so well by professionals, how difficult must millions of the very lowest paid people who have no benefits advice at all find it?
	It is not surprising that the computer system could not cope with the system. Indeed, I have problems with just one computer, so I understand that there were problems there. On the other hand, reading these reports, if one is not careful one can lose track of the objective, which is to help the lowest paid people in the land. In fairness, I am bound to say that I have not heard any alternative proposal from the noble Baroness, Lady Noakes, or the noble Lord, Lord Oakeshott, that would help the lowest paid in the land.
	Some of the lowest paid are clearly not benefiting from the system. They are not only not benefiting but are suffering from the way that it is operated. We must recognise that. I know from what the Minister has said, and from what my right honourable friend in another place said, that the Government recognise the difficulties that have arisen. I am pleased to hear that the Treasury has agreed and the Paymaster General has instructed the Revenue to suspend the reduction of income where there is a dispute. It is not enough just to do that in the case of a dispute. Many of the people that we are talking about do not even know that there is a dispute. It needs to be more carefully handled.
	I know that there is a helpline, but most of these people do not know how to press buttons one, two, three and four, which you are usually told to do when ringing a helpline. It is important that there should be greater understanding, sympathy and care in the Revenue departments for the people concerned. It is no use saying, "We should sack the people who handled this". They were handling complex issues, and making party political points is not helpful to the people concerned.
	One of the major recommendations of the citizens Advice Bureaux Report is that all adjustments to payments should be limited to ensure that claimants cannot be left with weekly incomes below minimum levels. That is an important recommendation. Will my noble friend say that that has been accepted and that the Revenue will be told that that must apply? We are dealing with people on the very lowest level of income. We do not want to see that made worse rather than better, which is the objective of the scheme.
	Of course, I appreciate that where there has been overpayment there is a case—I am glad that the Government have accepted it—for writing some of it off where serious administrative errors have been made by the Revenue. However, one has to recognise that we are dealing with many hundreds of millions of pounds of overpayment. Before we start writing off public money in that way, the Government have to be very careful that it is being written off in appropriate cases.
	As I say, and as we all know, the tax system is complex. Normally, it is in one year that a tax adjustment is made. If that happens, people with low levels of income can be forced to repay sums in a very short space of time. I would like an assurance from my noble friend that even though repayment may have to be spread over a longer period of time, it will be so spread in order to help the very people that we are trying to help.

Baroness Buscombe: rose to ask Her Majesty's Government what steps they are taking to protect intellectual property rights for the creative industries.
	My Lords, before asking my Unstarred Question, I want to say that there is an element of Alice in Wonderland, when I look at the time allowed. The Order Paper states that we are time limited to one and a half hours, but that the time for speeches is expected to be limited to 10 minutes. There are precisely two speakers and the Minister—two times 10 makes 20, plus 12 minutes for the Minister makes 32—and we have one and a half hours. Perhaps the Government do not feel that intellectual property is important, but we do. However, sadly, I have culled my speech to 10 minutes.
	I am asking this Question in your Lordships' House today because I firmly believe that we are the best in the world as creators and originators of novel and inspirational works. Currently we are in the midst of an era which presents tremendous opportunities for commercial change and development in the creative industries as a whole. Solid intellectual property protection lies at the very epicentre of sustaining and promoting vibrant and fresh new works from the talented individuals of this country. As the noble Lord, Lord Evans, said only last week in response to a debate on the arts as a tool for urban regeneration:
	"the noble Baroness, Lady Buscombe, dealt with something that I believe goes to the heart of the matter; that is, intellectual property rights. As matters develop, it is becoming increasingly obvious that there is almost a need for new law to protect those important and developing rights.—[Official Report, 16/6/05; col. 1360.]
	There is no doubt that if we are to sustain our leading edge in the creative industries and to compete successfully in global markets, we must have effective IP protection. In particular, copyright management and effective protection is an issue which is central to the success of the creative industries. Moreover, over the past few years copyright has taken a front seat and concerns relating to the prolific and burgeoning industry in Internet downloads have been increasingly well publicised.
	The current legal framework has substance and a number of interventions from Europe has successfully modified our national provisions to cope with changes resulting from ever-improving electronic methods for sharing information. But are the Government doing enough to ensure that loopholes in the current legislative patchwork are quickly closed off and that a sensible review of potential future improvements, piracy being one such area, is being conducted in concert with the rest of Europe?
	It is vital that this important area is kept under the spotlight and it is for that very reason that I first tabled this Question over a year ago. During that period the Government have made strides to improve publicity and education in intellectual property matters. I agree with at least one aspect of their current strategy; that existing creators' rights require better and more effective enforcement, particularly in view of the increase in piracy. However, a recent proposal put forward by the Minister in another place, James Purnell, that,
	"the IP framework should be reviewed to determine if it is appropriate for the new age of fast-paced technological developments",
	is too ambiguous. Is the Minister just trying to backtrack with warm words following eye-catching announcements in the media heralding stronger IP protection? If so, he must know that this strategy can actually create uncertainty and instability in the marketplace, and is potentially harmful.
	While I agree wholeheartedly with any endeavour to draw out the industry's problems, my wonder is whether anything is being delivered. Moreover, are the Government paying attention to what the EU Commission is already doing? The Commission has itself launched very similar initiatives to look at the IP framework, albeit on an EU-wide scale.
	On that European note, this year, as a consequence of its Better Regulation initiative, the Commission will conduct further extensive reviews of a number of areas, including copyright. The Commission intends to review the practicalities of how copyright and related rights are commercially exploited on a day-to-day basis. Essentially, the fact that copyright is still largely administered on a national level leads to certain inherent inefficiencies in the regulation of rights-rich global media such as the Internet. For example, the way in which collecting societies do business in each of the EU member states may well come under scrutiny during the Commission's review.
	The Prime Minister's imminent presidency of the EU offers a gilt-edged opportunity to press our claim for stronger IP legislation and enforcement. This includes increasing the term of protection for sound recordings. Can the Minister confirm tonight that the Prime Minister will deliver on this opportunity?
	On the domestic front, the Government's announcement that they will help to fund a study to assess the viability and possible shape of a dedicated music council has been welcomed with open arms by the industry, but I urge a note of caution in that any partnership with government must not diminish the industry's freedom to question government policy and direction. I do not want to be a killjoy, but I urge the industry to ensure that this is not just another popular headline that serves to deflect genuine delivery.
	Talking of delivery, surely it is now time to deal with the duration of copyright for performances and sound recordings. An appropriate duration is fundamental to the ability of the music sector in Britain to continue to take a leading role, culturally and economically, on the international stage. While performers in the United States are assured of 95 years of protection, the rights of artists residing within the UK expire after just 50 years, and during their lifetime.
	How can a 50-year term be deemed proportionate when the songwriter enjoys copyright in his lyrics for a term of life plus 70 years? This obvious inequality serves to place our music industry on a weaker footing in comparison with other countries such as the USA. Even Guatemala and Honduras enjoy more extensive protection than us. The distinction in copyright term between Europe and the USA serves to confuse and bewilder both artists and producers alike. The commercial impact of such an erosion of confidence in European legislation is that both performers and producers move abroad in search of better terms.
	This is a well-known problem and one that causes commercial concern to the industry as a whole —and that includes composers and songwriters. The value is in the creative content. A timely and certain remedy must be found.
	I mention the industry "as a whole" for good reason. It is a common conception that only wealthy, multinational, commercial record companies and publishers suffer as a result of erosion in copyright value. It is this fallacy that brings about limited sympathy from the general public. However, the damage runs much deeper. The effect of reduced profits at the top of the tree means reduced budgets and tighter deals with original and creative composers, musicians and songwriters. Less chance, less opportunity and less prosperity is the harsh reality faced by this group of individuals. Funding new artists becomes harder and as a direct result talent may remain untapped, undiscovered or unfulfilled. Improvements in the extent and enforcement of copyright could very well serve to benefit everyone from the top down.
	This is about looking after our innovators. Providing for the benefit of the industry's major players ensures that we are better placed to extract and exploit the benefit of our strong individual talent base.
	I turn now to the infringement of intellectual property rights. In essence, it can take just one casually uploaded album or track to devastate the legal market for that recording. There is a perception that downloading music and film from the Internet is a victimless crime; this is simply not the case. There are essentially two aspects to consider: the first is the problem with our friends, colleagues and children downloading music from the Internet; the second is the more serious, well-organised criminal syndicates which extract many millions from the music and film industries on a daily basis. Research indicates that the value of the black market in counterfeit and pirate DVDs was at least £600 million in 2004, with the figure for the music industry being very similar. Furthermore, over £320 million of music sales were lost over two years because of illegal downloading in this country.
	In relation to hardcore piracy and criminal activity, an opportunity to remedy the problem is being presented by the enforcement directive, due to become law in April 2006. There are concerns that the Government are delaying implementation of the damages provisions which will allow strong and dissuasive punishment for criminal activity. Can the Minister confirm that the enforcement directive is on course to enter the statute book as planned?
	But strong legislation is not the end of the problem. Effective enforcement is the last step in catching and prosecuting criminals. At present there is simply no incentive for poorly funded and understaffed trading standards offices to launch and persevere with long, drawn-out prosecutions against counterfeiters. The Government are simply not doing enough to help trading standards offices. More must be done on an urgent basis to send a message to criminal syndicates that they will be effectively prosecuted and that the risks are far from minimal. Trading standards offices must be properly funded.
	Also, the planned reform of the Patent Office is crucial to achieving an efficient and robust IP framework. The unmistakable challenge will always be that of how to ensure that we get a return on our investment, be that in artists and repertoire or research and development. The value of our inventions and creativity must not be allowed to ebb away through illegal copying. A central plank of government policy for the next few months should be in reforming the Patent Office into a strong, politically-led champion of intellectual property. One of its core terms of reference could fall directly under the Labour Party manifesto commitment to,
	"ensure that content creators can protect their innovations in a digital age".
	If only I was allowed the time to touch upon so many more important concerns held by the wider industries. For those who make photography their life's work, protecting their copyright goes beyond the emotive; it is their livelihood. Without adequate protection the photographic image—tomorrow's cultural heritage—and those who create it will cease to have true value, and without adequate protection a profession dies. Photographers are concerned that, in the digital age, information supplied with the digital image about copyright and the creator is stripped away, often automatically, so that in a matter of moments the world is awash with "orphan" images.
	In addition, recent changes in design law have impacted upon design rights and copyright protection for products as diverse as clothing, toothbrushes and cars.
	Much of what I have said should, in an ideal world, be underpinned by a change in our consumer culture. One way of bringing that about is through better education, as the key to driving a healthy respect for intellectual property rights. We have to fund, teach and educate at an early age to enshrine the values of intellectual property as a bundle of rights that can be used as both a sword and a shield. In the words of David Arnold, Fellow of the British Academy of Composers and Songwriters and one of a new generation of exciting and innovative composers,
	"we need to teach young people that creativity has value".
	There is work to be done and I urge the Government to deliver.

Lord Clement-Jones: My Lords, I congratulate the noble Baroness, Lady Buscombe, on initiating this debate on a very important issue. I share her bafflement at the time limits—I see that she busted them quite successfully and I shall do the same probably—but I suspect that this is due to the Companion rather than to the Minister, who I am pleased to see is in his place today, contrary to the advanced billing.
	This debate is extremely active, both between countries and within countries. I came back from the United States this morning and, as one does, I picked up the literature that was lying around in the airport lounge. I have the intellectual property issue of the Technology Review, produced by MIT, in which two extremely distinguished professors of law—one at Stamford and the other at the University of Chicago, who are heavily engaged in this area—debate the potential outcome of the Grockster case, which is before the US Supreme Court. This case concerns downloading peer-to-peer, as it is called, on the Internet.
	In a sense, that case is a successor to the Napster case, although it is not about deriving a work from a central source but from other individuals—known as "file sharing". It is an extremely important case which, no doubt, will heavily affect us in due course. It is just one example of where the debate is raging.
	Another area concerns the debate which is raging between countries. WTO accession has meant that China and India will have to observe copyright law to a much greater extent. Many of the arguments between governments lie in trying to persuade some of the developing countries that it will improve business confidence if they observe copyright fully and will help direct inward investment to those countries. So copyright is extremely important both for international trade and for domestic creative industries.
	I have a longstanding interest in copyright. I used to work for a law firm which specialised in this area. We ran the Redwood case—the famous music copyright case—but unfortunately we lost it. I was also at London Weekend Television when, in the 1980s, it was involved in the thick of licensing and negotiating rights for what were then the new areas of video and satellite. The motto of copyright laws in those days was very much, "What is worth copying is worth protecting". Now, however, with new works that can be made from samples both of music and film, the world has become rather more complicated. We also, of course, had the debate over moral rights, particularly in the art world. They are now available under the EU copyright directive of 2000 and artists are entitled to payment on resale of their works.
	Many debates are taking place. I shall come to the issue of product counterfeiting in a moment—it is of extreme importance and of great concern to a number of industries—but I believe that it is the Internet which will in future pose the biggest challenge to copyright law. Copying is now so much easier. First it was text, then graphics, and now music downloads are quite commonplace. Soon film works will be downloadable as a matter of course when compression software and computer memory improve.
	This raises the issue—the subject of the US debate I mentioned earlier—of how much, to use the expression of Professor James Boyle, "digital barbed wire" is needed to put round original works and, by contrast, what should be allowable under the fair dealing provisions. What level of protection is appropriate and what are the key problems that need to be combated? For instance, what lessons for the future does the original Betamax case have for us? Limiting technology too much may lead to infringement but may also lead to beneficial uses.
	The newspapers in this country are currently full of details of the action that the British Phonographic Industry is taking against people—often very young people—for multiple copyright infringement through peer-to-peer music downloading. I believe that the BPI is right to take this action. Indeed, I believe that the action taken by the BPI, by FACT, by the Alliance Against Counterfeiting and Piracy and by other organisations is protecting in the correct fashion the rights of their members. But when it comes to enforcing judgments against parents—particularly where, out of ignorance, they did not really understand what their teenage children were doing—I hope that the settlements will not be too draconian. I believe that this is a very necessary form of public education but I hope that the BPI, in particular, is not too punitive when it enforces payment against these parents.
	As to Grockster, I very much hope that the rights of the film companies will be firmly upheld but, by the same token, I hope that the film companies will begin to establish—in the way that the music industry did with iTunes and other MP3 downloading charges—different legitimate forms of licensing for film works. It may be that the very complicated release dates—which go in stately fashion from theatrical release, to DVD, all the way through to terrestrial free broadcast—will need to incorporate a window which is applicable to the Internet and will allow people to download legally in the way that it is now possible to download music.
	It would be very useful to know whether the Government are considering the implications of these cases. I am sure the Minister will refer to this in the course of his winding-up speech and I look forward to it. I also hope that he will respond to the noble Baroness, Lady Buscombe, on the issue of the extension of the 50-year copyright rule on songs. We believe that the Government are favourably disposed towards it but we have not seen in hard black and white that that is the case. It is, of course, to some degree controversial, but I believe that there is a very good case to be made for international harmonisation. It seems fairly ludicrous that there is protection for 95 years in the United States and for only 50 years here.
	Quite apart from these issues, there are two areas in which urgent government action is vital. I refer, first, to the area of counterfeiting. I am reliably informed that this costs the creative industries something of the order of £11 billion in the UK and that the businesses concerned employ 1 million people. One of the puzzles is why Sections 107A and 198A of the Copyright, Designs and Patents Act 1988 have not been brought into play. They would give trading standards officers analogous rights to those which are available over trademarks. I do not understand why the Government have not brought those sections into effect. It is all very well for film companies and others to bring copyright infringement proceedings, but if those rights cannot be enforced by trading standards officers—for instance, over counterfeit DVDs—then surely that means they are not nearly as powerful as they should be.
	There are issues about what progress is being made regarding the EU harmonisation enforcement directive. I was interested that the noble Baroness, Lady Buscombe, mentioned this. The UK presidency will be important. The Secretary of State, Tessa Jowell, has said that the UK intends to use its presidency to have a debate about further rights and the enforcement of copyright for the creative industries. That will be extremely valuable. So I hope that progress will be made and that the Minister will address that point in his reply.
	There is a further issue of great importance to composers, particularly those who compose music for television programmes. When they are contracting with television and production companies—the BBC is an honourable exception—they have to contract with nominated publishers on rather disadvantageous terms. That is anti-competitive behaviour and it should be prohibited. I am in favour of copyright protection and contractual rights but not when there is not fair competition or there is coercive behaviour. That applies across the board. This is clearly an area in which Ofcom needs to be proactive; if it does not have the powers to be proactive, it should be given them. I should be grateful if the Minister could address that. What is probably needed is a code of practice prohibiting such behaviour.
	Finally, we need a better mechanism for the Government to stay abreast of these issues in a joined-up way. I was very interested in the provisional conclusions on the review of the Intellectual Property Advisory Committee's work. Can a reconstituted committee play a really effective role? If we are to make this a priority for our EU presidency, we need the best possible advice and all the right people on board.
	A few years ago, the creative industries intellectual property group, chaired by Kim Howells, produced an interesting report. It contained very interesting conclusions about public education in this area. That is important, and the noble Baroness, Lady Buscombe, rightly alluded to it, but it is only half the battle. We must ensure that those who wish to use samples to create further works of art on the back of existing copyright are not unduly disadvantaged. That will benefit the industry and ensure that the consumer is not overly burdened with rights. If we are to use our presidency to this end, there should be an effective body advising the Government in this respect. I hope that the Minister will address that in his reply as well.

Lord Astor of Hever: My Lords, I, too, congratulate the noble Lord, Lord Alton, on securing this important debate and on giving the House the opportunity to discuss the plight of street children in Latin America. It has been a most interesting and informed discussion, one that follows on well from the more general debate on developments in Latin America, led by my noble friend Lady Hooper on 26 May.
	As my noble friend Lady Rawlings stated in that debate, with Her Majesty's Government's focus on the problems of Africa, it is all too easy to forget that there are problems that are just as serious and urgent in other parts of the world. It is essential that this House keeps a spotlight on these other areas, especially when there are more people in Asia and South America who subsist on less than a dollar a day than there are in Africa.
	It is clear from the debate on 26 May that, despite the unrest that we have witnessed in Bolivia and the continual problems of internal armed conflict in countries such as Columbia, Mexico and Brazil are, as the BBC once put it, "gentle giants awakening". They are areas where political stability is working hand in hand with a growing economy, enabling both countries to look outwards and to help anchor the continent as a whole. Let us hope that that remains the case after Mexico's presidential elections next year.
	So, some steps, if faltering, are being taken by the member countries of Latin America. However, these nations will not develop the international respect to which they aspire without addressing the shocking human rights violations that are carried out in their societies. The plight of the street children has been passionately demonstrated by your Lordships. It is clear that, while Brazil is the most cited example of a country's failure to address its commitments to the UN Convention on the Rights of the Child, it is not by any means the only one. Guatemala and Honduras, as the noble Lord, Lord Alton, mentioned, are examples, too.
	Although Brazil has failed to produce 13 reports under the six core United Nations human rights treaties, 226 reports are overdue from various other nations under the UN Convention on the Rights of the Child. Being forced to produce the reports, those nations are compelled to look at the issues and to address the failings of their systems. I wonder whether Her Majesty's Government are taking any steps to help to address the issue.
	The sharp contrast of wealth distribution is visually brought home by the sight of shanty towns next to the air-conditioned homes of the elite, particularly in the otherwise beautiful city of Rio de Janeiro. In Brazil there are an estimated 25 million deprived children and around 8 million of them live on the streets.
	As the noble Lord, Lord Alton, has highlighted, the proliferation of drugs and small arms means that around four to five children and adolescents are murdered in Brazil every day. In Guatemala City alone, there are, on average, two violent murders of children a day and last year there was a total of 847. The Honduran Government have officially recorded 1,030 children under 18 killed since 1998, although NGOs report a figure closer to 2,500.
	It appears that few have been held accountable and brought to justice for those deaths. Despite moves toward a more civil society, the apparent impunity with which perpetrators of such crimes operate—they are often police or security officers—shows a distressing lack of political will and transparency to deal with the issue seriously.
	The horrors of the figures that I have just mentioned exclude those who die from sexually transmitted diseases and HIV/AIDS following enforced prostitution, a subject mentioned by the noble Baroness, Lady Gibson, and the noble Lord, Lord Brennan. In Brazil's two biggest cities there are an estimated 150,000 child prostitutes, boys and girls as young as eight years old, controlled by strong organised mafia.
	Will the Minister inform the House what advice and resources the Government have supplied to the Latin American countries to help to train specialised police units to investigate sex offences against children? What anti-corruption support are they providing to help to hold to account police officers and politicians involved in such despicable schemes?
	Corporate social responsibility is an important approach in helping to tackle this distressing issue from afar. Will the Minister inform the House of any government-led or sponsored trade missions run by the British Council or any other organisations to raise the issue with companies in Latin American countries? What steps are Her Majesty's Government taking to ensure that they have no dealings with companies and organisations which are known to profit from the use of drugs? What pressure are the Government putting on respective governments to assess the gun ownership and illegal trade in small arms within their countries?
	What response has Her Majesty's Government taken in response to the Jubilee campaign's call for public information campaigns to promote understanding and sympathy for the situation of street children in Latin American countries? Many NGOs provide street children with the necessary shelter from violence and sexual exploitation. They provide food, clothing, medical treatment and, most importantly, general educational and training programmes to help to get them off the street.
	I was most impressed by the description given by the noble Lord, Lord Brennan, of the wonderful work that his consortium is doing there. I want to reinforce the question raised by the noble Lord, Lord Hannay, about the pledges of DfID in this area and how they have been carried out.
	Finally, I hope that the Minister will confirm that during the G8 summit some time will be made to discus vital needs of the poverty stricken street children of Latin America. After all, as the noble Lord, Lord Hannay, rightly said, this issue is a continual reproach to the conscience of the international community.

Lord Triesman: My Lords, like other noble Lords, I thank the noble Lord, Lord Alton, for giving us the opportunity to discuss the plight of street children in Latin America. Again, he has demonstrated, as he so often does, his considerable personal knowledge. That knowledge has been of great benefit to the House and I thank him for it. I am also grateful to all noble Lords who contributed to the debate. We have had a good deal of sharing of knowledge and compassion but knowledge and compassion are plainly not enough.
	As the Minister with responsibilities for Latin America, I am encouraged to see the interest in that region in this House. We have had two debates in a very short period—within a month—which I welcome. I say to the noble Lords, Lord Hannay and Lord Astor, that of course Africa is vital to the G8 discussions for all the reasons of which we are aware, but that will not distract us from Latin America and these issues. These issues do not go away because we have that concern.
	In general, the rights of children worldwide are a central part of our human rights policy. I stress that that is the Government's position. As my noble friend Lord Brennan reminds us, it is also our responsibility, as a civilised people in a civilised society, through charities, government and all parts of our society, to realise that we have obligations and ethical responsibilities. During the debate, my noble friend and others illustrated the values that underpin that, for which I thank them.
	Poverty, unemployment and social dislocation leave many children with no option other than to leave home. On the streets they are often excluded from accessing key services such as health and education and they lack the support that most of us assume we shall have in life of kinship and social networks. Many suffer and are at greater risk from organised violence, trafficking, sexual exploitation, enforced prostitution and HIV/AIDS. In addition, poor police training—in some places I suspect there is no police training—low salaries and weak judiciaries can exacerbate the problems. It is the underlying causes of deprivation and exclusion, as well as the requirement for police and judicial reform, that need to be tackled if there is to be a serious long-term solution.
	The noble Lord, Lord Astor, was right to say that the growing economies of the continent are fundamental if they are to make progress at all. Yet there is so much more to do because so much is going wrong. Reports are required from many countries. In response to one point raised, we try to monitor against the criteria set out in the Convention on the Rights of the Child, because that is the most widely ratified of all the core human rights treaties and because monitoring is needed as implementation is so patchy.
	The UN Committee on the Rights of the Child considers implementation of the convention. We have supported training for NGOs—this is a direct response to the point raised by the noble Lord—to improve the quality of all shadow reporting to the committee. That means that the committee receives fuller pictures, year-by-year, of the situation on the ground in any state party. That includes, in our case, work done with the NGOs in Belize, Bolivia, Costa Rica, Ecuador, Nicaragua, Trinidad and Tobago and, of course, Brazil, which is at least making efforts to be up to date in its reporting.
	The noble Lord, Lord Hannay, asked us what we are doing. The Government see a broad agenda that we must tackle when we approach the plight of street children in the region. That can be pursued both in lobbying and influencing and in direct support to project work.
	I turn first to poverty. I should like say a little about the exceptional work that my colleagues in DfID are doing. Our contributions to multilateral institutions for work in Latin America amount to about £100 million a year. An annual bilateral programme of £11 million will complement that by helping the Inter-American Development Bank and the World Bank to improve their ability to tackle poverty, inequality and inclusion in their programmes. It also supports efforts to improve donor harmonisation and the effectiveness of government poverty reduction strategies to include social exclusion and child poverty. Our contributions to the European Commission, rightly emphasised by the noble Lord, Lord Hannay, are also assisting them to implement a social cohesion programme in Latin America.
	We also recognise the important role of civil society, which has been demonstrated so clearly by all noble Lords speaking in the debate. We also support that. On the lobbying front, I can assure the House that we have made clear to the governments of Latin America, bilaterally and with our EU partners—in our presidency of the EU, given my responsibilities, I will certainly continue to do so—the importance we attach to respect for human rights and, at the heart of those, the rights of children. Together with our European partners, we continue to call for all states parties to the Convention on the Rights of the Child to implement their reporting obligations.
	I was pleased that my noble friend Lady Gibson drew attention to the convention and our responsibilities to the UN. After all, that is a cornerstone. The UN is still working on those issues—and still failing, I suppose, with regret, I must say; but still working. We closely monitor progress. In some areas progress is being made in countries in the region where there is concern, including in Central America and Brazil.
	Perhaps I could talk about a few countries to illustrate the point. The noble Lord, Lord Alton, talked about the Jubilee campaign and illustrated it with Brazil, and other noble Lords mentioned Brazil. The noble Lord described a harrowing, terrifying list—a catalogue—of degradation and lack of value attached to children's lives. In the article to which he referred, which I read with interest—actually, interest is too pallid a word; it is a moving article—he made the point that in the absence of gravestones the website provides the only documentary evidence of the children's lives that have been lost, of children's deaths. He is right to ensure that these issues are not forgotten.
	My noble friend Lady Gibson was right to say that the Brazilian Government recognise the scale of the problem, but it is below governmental level where there is evidently much work to be done. According to the latest report of Brazil to the UN Committee on the Rights of the Child, major problems exist in the realisation of children's rights. Those are the effects of, inter alia, unequal social structure, the growing incidence of early pregnancy and child labour.
	There are also a number of positive developments; for example, a decrease in infant mortality and a significant expansion of primary school education. Brazil has introduced a number of programmes, such as the Family Grant, the Zero Hunger Programme and the Programme for the Eradication of Child Labour. However, all of that does not remove the problem, which was so powerfully illustrated by the noble Lord, Lord Hannay, when he described the work of members of his family and the NGO work that is essential.
	We engage frequently with the Brazilian Government on all those issues, both bilaterally and through the European Union, on a broad range of human rights issues, including about the situation of street children. The Government have funded a number of projects in the human rights field in Brazil, including tackling some of the more pressing problems of violence in the slums of Rio de Janeiro.
	A priority area for projects in 2005–06 is the promotion of child rights in that context. Our embassy in Brasilia is currently in discussion with the Brazilian Government on how they can assist in developing a training programme to build vital capacity among the Brazilian judiciary in the areas of juvenile justice and young offenders. That infrastructure is plainly vital, as this debate has illustrated.
	In Ecuador, to which the noble Baroness, Lady Miller, referred, unofficial statistics suggest that there are 1 million working children there, of whom 5,000 are street children or at social risk. For several years, our Embassy in Ecuador has assisted JUCONI—the Junto Con Ninos—which is one of the main NGOs working in this area. Incidentally, the Mexican embassy is engaged in a similar way in Mexico. As the noble Baroness said, JUCONI's main challenge is to get street children—in many cases the family breadwinners—back into education, by providing family support and encouragement. It was really good to hear that the first of those children has got to university. That is surely lighting a light in that country. I congratulate the noble Baroness on her work there.
	In Central America, we have raised concerns about issues in those countries. Our embassies maintain close contact with the region's governments, non-governmental organisations dealing with child protection, and other members of civil society. We regularly voice our concerns bilaterally and, as I said, with our EU partners. The problem in Central America is plainly made much worse by youth gangs, the Maras, as they are called, which are responsible for violence and increasing crime throughout the area. Young people and children, frequently from broken homes, may join those gangs when they are very young—as was said, they are almost a child army—sometimes when they are no more than 10 or 11 years old, to try to gain a sense of community and personal protection.
	Studies have shown that young people are often desperate to leave the gangs but reintegration into the mainstream of society is difficult, especially for those with visible tattoos. It has been almost impossible for them. With no prospects of employment, many young people remain locked into the vicious cycle of crime and drug dependency that inevitably brings them into conflict with the law.
	We have provided support for many local projects in Central America to help protect children and fund equipment as well as to support training for local police forces across the region. DfID has also supported government programmes to strengthen social services, improve conditions and protect vulnerable children. That is a significant part of DfID's programmes across the continent.
	My noble friend Lady Gibson also drew attention to Honduras, which has been particularly affected by gang violence. Examples of work that we have supported there include assistance in setting up a government special investigative unit for deaths of minors and a community policing project on children in conflict in conjunction with Save the Children. We have also funded a study by the Children's Legal Centre at Essex University, with which my noble friend will be familiar, to investigate the juvenile justice system. The final report of that study, which is being undertaken by a very good group of academics there, will be launched in September 2005 at a regional conference on children in conflict with the law and will guide future legislation in this important area.
	During 2004, DfID gave Honduras £1 million to support its poverty reduction strategy, including the analysis of child poverty and the plight of street children. The strategy commits the government to reduce child labour, improve the quality and equity of education and improve child health coverage. Our embassy is monitoring that.
	In Guatemala, where we understand from Casa Alianza that in Guatemala City alone there are some 4,500 street children, we have funded the research and publishing of a manual to train the local police force in child rights and child protection, with particular focus on street children. This work was carried out with the NGO, Consortium for Street Children. We have funded Casa Alianza work to refurbish a home for former street children and a shelter for sexually abused children with the human rights ombudsman office.
	As I briefly summarise those national examples, I fell compelled to admit that training of police forces and the judiciary are very important steps into which we should put resources. That will not stop wicked people from being wicked, I fear, but it is a means of ensuring that we intervene as purposefully as possible in those areas.
	In response to the noble Lord, Lord Hannay, we are working hard on voluntary-sector training to boost its excellent efforts as much as possible. DfID and the FCO work substantially with the local NGOs in programme delivery—largely because they are the best placed organisations to deliver those programmes—and to help to build their capacities. Examples include Casa Alianza, in Central America; ChildHope International, in Brazil; and projects in Venezuela and elsewhere. There is a long list, which I shall not go through, but it is serious.
	In response to my noble friend Lord Brennan, the Guatemala project is also deeply involved with the local NGOs in training the local police in child rights. It is another area where that specific problem is being addressed.
	Most of the reports that we have heard today are truly shocking. It is sad to have to admit that there are no quick fixes or magic solutions. The noble Lord, Lord Astor, raised some of the central problems about small arms. Although it is no quick fix, my right honourable friend in another place Jack Straw is promoting the international small arms treaty in an attempt to get some control of those issues. As I said earlier, the underlying causes are the deeper issues of poverty, inequality, social exclusion and, as the noble Lord, Lord Alton, rightly says, the acute problem of drugs and drugs trafficking.
	If I quote Nelson Mandela accurately, those are all blights caused by human beings. Of course, natural disasters are not blights made by human beings but they add to and compound the misery of what we do to ourselves as human beings. We have real ethical obligations in that regard.
	The noble Lord, Lord Astor, asked what we would do about corruption in companies and governments. At the G8 summit the issue of anti-corruption and good governance in governments is fundamental to the whole package concerning debt write-off and aid. Our own legislation is fundamental to dealing with and penalising corruption. As I have said, we are working in all those spheres to assist Latin America in that broad agenda and trying to tackle the more specific issues related to street children. The noble Lord, Lord Hannay, can rest assured that we will pursue that role with our partners in Europe during our European presidency and beyond.
	I can say to the noble Lord, Lord Brennan, that I will seek to ensure that our HIV/AIDS programmes include special reports on the position of children. I will discuss that both in my own department and with DfID. I will also discuss visits to street children. As I am sure noble Lords know, many visits already occur, but I will ask what the programmes are, as I am as keen to know the answer to that question as I know the noble Lord is.
	Governments in the region recognise the root causes of the problem, and some are making progress. We will continue to encourage and assist them to make more progress. We must go beyond knowledge and compassion to make progress. We will only let ourselves down if we do not do that.